Cybersecurity Stocks Drop After Hours: Here's Why

Cybersecurity stocks are getting torched late Wednesday on the heels of Fortinet Inc’s (NASDAQ:FTNT) third-quarter results. Here’s what you need to know.

• Fortinet stock is among today’s weakest performers. Why are FTNT shares down?

Fortinet Results Weigh On Cybersecurity Sector

Fortinet reported financial results for the third quarter after the market close on Wednesday. The cybersecurity company beat estimates on the top and bottom lines, reporting revenue of $2.08 billion versus estimates of $2.06 billion and adjusted earnings of 91 cents per share versus estimates of 86 cents per share.

Despite the better-than-expected results, Fortinet shares were down approximately 25% at last check, according to Benzinga Pro. Investors appear to be hung up on revenue growth and guidance.

Fortinet reported year-over-year revenue growth of 20%, which is slowed from growth of 26% last quarter. The company also cut its full-year service revenue forecast from a range of $5.18 billion to $5.22 billion to a new range of $5.15 billion to $5.17 billion.

With shares having more than doubled year-to-date heading into the print, expectations were likely elevated. The weakness in Fortinet is spilling over to the rest of the cybersecurity sector. Here’s a look at some of the biggest movers:

• Palo Alto Networks Inc (NASDAQ:PANW) down 6.66%

• CrowdStrike Holdings Inc (NASDAQ:CRWD) down 6.05%

• Zscaler Inc (NASDAQ:ZS) down 6.40%

• Okta Inc (NASDAQ:OKTA) down 5.24%

• SentinelOne Inc (NYSE:S) down 5.45%

• Rubrik Inc (NYSE:RBRK) down 6.96%

• SailPoint Inc (NASDAQ:SAIL) down 9.78%

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